Holy SmokeShack! Shake Shack is a well-done stock

This burger is delicious. But Shake Shack stock is still not an appetizing stock for investors.

It's a Shack attack on Wall Street.

Burger chain Shake Shack(SHAK), which has a big chunk of its stores in Manhattan, is one of the hottest stocks this year. Shares surged nearly 12% Tuesday and hit a peak of $60 before cooling off slightly Wednesday.

Shake Shack is now up about 180% from its initial offering price of $21 and more than 25% above the price it closed at on its first day of trading back on January 30,

There has been very little news about the company to justify the huge surge. Sure, it's adding locations. But that may hurt profits in the short-term.

In fact, investors were slightly disappointed by the company's first earnings report as a public company last month. Shake Shack reported a loss and said same-store sales growth may slow a bit this year.

But Shake Shack is cool. Millennials love it. And for the record, so does this Gen X-er with two kids, a mortgage and more than a touch of gray in my hair and beard.

But does the stock really deserve to be trading at nearly 1,170 times 2015 earnings estimates and more than 13 times sales forecasts just because it makes deliciously addictive burgers, fries and shakes? (Selling beer and wine doesn't hurt either ... especially when bringing the aforementioned kids.)

Shake Shack is valued at a huge premium to much larger (albeit slower growing) burger joints like McDonald's(MCD), Burger King owner Restaurant Brands International(QSR), Wendy's(WEN), Sonic(SONC) and Jack in the Box(JACK).

It's also much more expensive than Habit(HABT), a West Coast burger restaurant that went public last year and is also benefiting from the "better burger" craze.

Wall St. is salivating over Shake Shack

The only thing I can think of to explain why Shake Shack has done this well is one that is not necessarily something to cheer. There are a ton of bearish investors betting that the stock will fall.

According to figures from late March, more than a third of the company's available shares were being held short. These investors have borrowed the stock and sold it with the hopes of buying it back at a lower price and pocketing the difference.

These short sellers appear to be getting squeezed. The huge surge in the stock may be leading the shorts to quickly buy back (or cover) their positions so they don't wind up taking a huge bath.

That's a temporary phenomenon though. And short sellers tend to be persistent. They are likely to target the stock again -- especially since its valuation is so ridiculously high.

Investors thinking that Shake Shack may be the next Chipotle(CMG) have to be careful.

It may just be the burger equivalent of GoPro(GPRO) and Alibaba(BABA) -- an IPO that flies high for a while but eventually crashes once investors realize the hype may have been too excessive.

Also, it's not like Hillary Clinton has been spotted at a Shake Shack yet. And as my colleague and paisan partner in culinary crime Cristina Alesci pointed out on Twitter, don't expect her to visit one anytime soon. There aren't too many Shake Shacks in swing states.

But there is one on Fulton Street in Brooklyn -- not too far from her new campaign headquarters.